Operating expenses increased by five percent from $26 176 706 in 2016 to $27 578 347 last year, as a result of non-recurrent staff expenses.

Briefing analysts on the group’s results, NMBZ chief executive Ben Washaya attributed the increased profit to an increase in income from transactional fees and a significant reduction in impairment losses on loans and advances.

He pointed out that last year was characterised by nostro funding challenges, cash shortages, company closures and job losses, which put pressure on the bank’s lending.

Interest income was adversely affected by the capping of 12 percent per annum as the maximum interest rate banks could charge borrowers in the productive sectors of the economy.

“However, it was good for the economy,” he said.

He said the positive financial results were largely driven by the bank’s broadening of its target market, migration to digital channels, stricter credit underwriting standards and concerted efforts to contain non-performing loans and operating expenditure.

The bank upgraded its core banking system and other electronic channels. It launched a mobile point of sale machine (mPOS) largely targeted at the SMEs and informal sector.

Drawdown on its lines of credit was limited by the need to reserve the funds for exporters, who have foreign currency generating capacity to support repayments.

The board declared a dividend of 0,36 cents per share, Mr Washaya said.

Mr Washaya said there had been a nationwide blitz to acquire low-cost accounts in order to promote financial inclusion.

He said the non-performing loans ratio was 7,98 percent, compared to 10,69 percent the previous year. He expressed satisfaction that the ratio had come down to a single digit figure. He said the bank was targeting five percent by the end of 2018.

“We will continue to promote our mortgages and leasing products to assist individual customers to own or improve their homes and enable companies to retool,” he said.